In today’s economy, growing your business is essential to staying in business. If you don’t find ways to create steady, sustainable business growth, increasing expenses, declining profits, shrinking market share, and pricing competition will run your repair shop out of business.
There are seven methods you can use in your diesel repair shop to obtain a healthy growth rate. In order to successfully achieve the level of growth that you seek, you must first decide upon your desired level of growth, and then choose the method that will be the most cost effective and least time-consuming for you to implement.
Method 1: Find New Customers
In order to successfully find and obtain new customers, you must focus on your lead generation system and sales conversion rates. You must determine what growth rates your current lead generation system creates and consider new tactics that will help you to achieve your goal growth rate.
Common barriers to generating new leads and converting them to sales include changes in the market segment, message or channel, or ineffective marketing and advertising strategies.
Lead generation is typically comprised of these 10 key areas:
1. Target Product/Customer Opportunities
2. Internet Marketing
3. Public Relations
4. Lead Nurturing
5. Branding
6. Phone Calls
7. Email Marketing
8. Prospecting
9. Direct Mail
10. Networking/Referrals
Finding the right combination of these key areas for your repair shop can be difficult and should not be taken lightly. It is important for each business owner to realize that each business is unique and therefore will benefit from a different combination of these areas than another business in the same industry.
For more information on marketing your diesel repair shop, download our FREE White Paper: 5 Rules for Successfully Marketing Your Diesel Repair Shop.
Method 2: Resell Previous Customers
This is the process of retaining customers over long periods of time by finding new and improved ways to fulfill their needs. This can be done through the use of increasing the quality of your products or services, or through the amount of relationship building focused on a particular, profitable customer.
The key to selling a current customer a new product or service is to anticipate their needs. By anticipating your current customers’ needs, you may identify a need before they even realize it! This will help them avoid gaps in their own business development, as you will be able to provide them with a solution before they develop any potential problems.
Method 3: New Product/Service Development
Following industry trends and determining the new needs of your customers before your competitors do, are crucial when using new product/service development as a growth strategy. Being innovative and creating the products/services to meet your customers’ needs before or as they occur can increase your growth a great deal in a relatively short period of time. Conducting in-depth research is vital to the success of this method.
Increasing your growth rate through the use of new products/services is sometimes as easy as adding a new service that your customers are in need of so they can obtain more with one company (yours), instead of having to use multiple vendors. A good example of this would be to offer a mobile repair service. Not only will you get new work from this service, it will also create opportunities to gain new, long-term customers for continued in-shop repair service.
Method 4: Merge with, or Acquire Another Diesel Repair Shop
Merging with, or acquiring another repair shop to increase your growth rate can be an expensive endeavor, but it can also be very profitable. The key is to put together a plan and process for acquiring a repair shop that complements your services, or fills in gaps in your services. If acquiring a shop in your market this is not an option for you, then obtaining a new customer base through acquisition in a new market area is the second-best approach to ensuring business growth within this method. The main goal of this method is to increase your market share.
When merging with, or acquiring another business, research plays a vital role. You must understand financial statements and develop a formula to make sure that you don’t lose money, and do whatever you can to reduce the amount of risk involved.
Method 5: New Market Expansion
This method pertains strictly to the geographic expansion of your repair shop; whether it be opening a shop in a new location or simply putting a sales rep in a new market, or even using Internet technology to expand your market reach.
It is important to do a detailed cost analysis of each option when deciding whether or not to expand into new markets. For example, if your repair shop is based in Detroit, but there is an opportunity to gain new customers in Toledo, you must find the most cost effective way of obtaining and servicing those customers. If the business need is great enough, you might want to consider opening a shop closer to the new client base. If there is a great need, but not one large enough to justify opening a new shop, simply either hire a sales rep that would work from the Toledo area and report to the Detroit shop, or have a sales rep from the Detroit shop travel to Toledo on an as-needed basis to meet the demands of the customer base located there.
Method 6: Pricing and Merchandising
The basis for this method is to change the combination of prices, products and services in such a way that it will increase both sales and profits at the same time. The combination of increasing both sales and profits simultaneously can be achieved by increasing selling volume while decreasing the cost of supplying those products/services, or through raising the purchase price of products/services while maintaining or reducing your cost to supply them.
For example, rather than just giving a customer an estimate to perform a specific repair job, offer them a full inspection and preventive maintenance service. This increases your sales and profits, keeps your technicians busy, and increases the value your shop brings to that customer.
Method 7: Developing a New Business Model
Developing a new business model could be as simple as creating a new product or service category, or as complicated as starting a completely new business. It can be created from an existing customer demand or buying another business as a franchise.
A good example of this would be to add a bump and paint division to your shop. This would make you a more attractive option for some fleet owners, because they would only have to use one shop for virtually all their repairs. This would save them both time and money; coupled with good customer service and high satisfaction levels, you could retain this customer for a very long time.